It does not necessarily follow that the process of action and reaction which characterizes the arms race, certainly the arms race in sophisticated weapons, means that security is increased as more is spent on armaments. Indeed in the field of nuclear weaponry the reverse appears to be the case. Each new step in the elaboration of such armaments usually ushers in a more perilous stage of uncertainty and insecurity. Furthermore, every new generation of weapons and weapon systems inevitably demands more and more resources which could be used for different economic and social purposes. By encouraging the development of certain areas of technology, and by providing resources for basic fields of science which might bear upon the development of sophisticated weapons, the arms race also inevitably affects the direction and tempo of a country's scientific and technological development. Its effect has been to encourage work in certain fields of knowledge and to retard progress in others. It stimulates a demand for certain classes of specialist and for certain kinds of specialized information, without which desired military projects could not be achieved. Short of powerful political decision in a contrary direction, this process, particularly so far as it concerns sophisticated modern weapons, could go on indefinitely.
The arms race has in fact become noticeably a technological race, the achievements of one side spurring the other to improve on the technological advances which it might have made itself. Sometimes the spur comes not from some clearly defined threat but from an imagined technical advance made by the other side. Secrecy in military affairs makes it inevitable that a potential enemy will usually be suspected of being stronger than he actually is. Consequently both sides strive continuously to improve the quantity and quality of their arms. So it is that the arms race becomes based on the 'hypothesis of the worst case', that is to say, one of two sides designs its programme of development on the assumption that its rival could, if it so decided, be the stronger.
Military expenditures not only divert resources from other uses, but also tend to disturb and destabilize the economy in general. Increased taxation or borrowing needed to raise money for arms (in developed market economies) slows the growth in personal consumption or private investment. If taxes are not raised, spending on such programmes as welfare services or education may be reduced, thus dislocating long-term social policies. Inflationary processes may be generated. In centrally planned economies, military expenditures limit the flexibility with which the economy can be planned, and the problem of preserving a proper balance between supply and demand for various industries and sectors becomes more difficult. In developing countries where the tax-base is limited, the pay of civil servants and the cost of military forces often take up much of the government's revenue. Revenues that might go into development are used instead for military purposes. In addition, military spending often puts a heavy burden on the balance of payments due to the purchase of arms from abroad.
The arms race is an important factor in limiting the expansion of international exchanges. Military considerations limit trade in so-called strategic commodities and products of advanced technology, and have led to creation of rival trade groupings. Strategic considerations inhibit technological and scientific exchanges between countries. Also, protectionist policies to favour domestic industry or agriculture are often defended on the grounds of maintaining the supply of vital commodities in time of war. This argument could not be advanced to justify trade barriers in a disarmed world. Trade between centrally planned economic and developed market countries has clearly been affected by the arms race and by the tensions between the two systems. This trade accounts for only 5% of world trade. It would rise significantly the faster the arms race came to a halt. As for the developing countries, the scarce foreign exchange resources used to obtain armaments could be applied to growth-producing purposes. In a world progressively disarmed, the level of trade could well be higher simply because of a higher level of world output.
In 1960 the deployment of submarine-launched ballistic missiles was negligible. By the end of the decade, some 55 nuclear-missile submarines were operational, comprising about 800 missiles, capable of delivering about 1,800 warheads. The number has since doubled. From 1960 to 1968 the world stock of fighting vessels is estimated to have increased from 4,550 to 4,900. This relatively small increase in numbers masks the much larger increase in the value of this stock (at 1968 prices, the value of the stock in 1960 was about $34,000 million, as compared with $60,000 million in 1968, a 75% rise). In 1960 the world stock of supersonic fighters was estimated at 6,000. By 1970 it had doubled. In 1960 there were 15 production programmes for supersonic aircraft; by 1970 these too had doubled. Doubling is a feature that continues and weapons proliferate in geometrical progression by number or power.
In July 1983 the superpowers were said to have reached a point of rough equivalency, the USA usually leading the way in new quantitative and qualitative technological changes, most recently with the Cruise missile, with the USSR never far behind and occasionally leading the way (as with very large missiles). Between 1983 and 1987 the USA is expected to spend more than US$ 1,600 billion, including a planned 3,900 aircraft (fighters, bombers and transport planes) and 8,800 tanks and cannon-carrying vehicles; and between 1983 and 1993, to produce 14,000 more strategic and tactical nuclear bombs and missiles. A future rate of real increase in military spending worldwide was estimated at a minimum of 2 to 3% annually. The latest escalation has been to extend the arms race beyond the earth's atmosphere in the so-called "Star Wars" defence programme.
2. The arms race has become a self-perpetuating institution. It has buildings and real estate. Fort Leonard Wood, one of the basic training centres in the US, is the fourth-largest city in Missouri. It is the biggest business in the US, employing tens of millions. It has the largest budget in the world -- over a trillion dollars annually -- of which the US contributes one third. It is remarkably stable in growth. Being in many dimensions the largest of all institutions, even if all the reasons for its existence were to vanish, it would (and does) create new ones to preserve its being. It is a competitive game perpetuated under the names of self-defence and negotiated peace. It will end only by being actively torn down. This will need breakthrough of the prevailing passivity and apathy at the individual level, and some surrender of sovereignty by nation states.
3. The world can either continue to pursue the arms race with characteristic vigour or move consciously and with deliberate speed toward a more stable and balanced social and economic development within a more sustainable international economic and political order. It cannot do both. It must be acknowledged that the arms race and development are in a competitive relationship, particularly in terms of resources, but also in the vital dimension of attitudes and perceptions.